Restaurant owners, hairdressers, and other small business owners across America have a message for Washinton.
Two weeks. Maybe a month. That’s how long they think they can hang on to employees before they have to permanently fire them and shut down completely. They need the bailout money today, only because getting it yesterday isn’t possible.
Terry Sok-Wolfson, who owns a bar and three Oakland, California-area restaurants, said:
“There’s no way that we can pay all the bills that are related to our business – the internet, dishwasher, our compost.”
She’s already closed all but one restaurant and says the third can survive for perhaps two weeks based on her slender cash reserves. Of 30 employees, 24 have been laid off.
If Sok-Wolfson and other small business owners don’t get relief soon, we might witness an unparalleled and rapid shutdown of the U.S. economy. Many business owners pledged their personal property against loans to start these businesses. Failure would reverberate through their lives.
Legislation approved by the Senate and expected to pass the House this week includes about $350 billion for lending to small businesses, and nearly $450 billion that the U.S. Federal Reserve could be allowed to expand into more than $4 trillion in help for small and medium-sized firms.
The programs dovetail with Small Business Administration loans meant to let firms cover wages, rents and other expenses through June. Much of that debt is to be forgiven if companies keep employees on the payroll.
We won’t get the details of a Fed “Main Street Business Lending Program” until the legislation is passed, but officials are telling us that they intend to act as quickly as possible.
Let’s hope they understand the difference between private business time and political time.
The big worry is that small business funds will flow through the Small Business Administration, where loans take 60 to 90 days. Many small businesses couldn’t survive.
The St. Louis Fed estimates that 46 million workers, or 30% of working Americans, have “high contact” with the public and might become unemployed in coming weeks.